Problem 1. Suppose the economy consists of three individuals, Brian, Dave, and Reynold who can only produce lectures and exams. The following table summarizes their hourly productivity: Opp cost of 1 exam Brian Dave Lectures 7 2 Exams 4 5 Reynold 4 3 a) Calculate the opportunity cost of producing 1 exam for each individual. b) Draw the Production Possibility Curve for this economy with exams on the horizontal axis.

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Problem 1. Suppose the economy consists of three individuals, Brian, Dave, and Reynold who can only
produce lectures and exams. The following table summarizes their hourly productivity:
Lectures
Opp cost of 1 exam
7
2
Reynold
4
3
a) Calculate the opportunity cost of producing 1 exam for each individual.
b) Draw the Production Possibility Curve for this economy with exams on the horizontal axis.
Brian
Dave
Exams
4
5
exams
c) What is the opportunity cost of producing one more exam when the economy is already
producing 6 exams?
Transcribed Image Text:Problem 1. Suppose the economy consists of three individuals, Brian, Dave, and Reynold who can only produce lectures and exams. The following table summarizes their hourly productivity: Lectures Opp cost of 1 exam 7 2 Reynold 4 3 a) Calculate the opportunity cost of producing 1 exam for each individual. b) Draw the Production Possibility Curve for this economy with exams on the horizontal axis. Brian Dave Exams 4 5 exams c) What is the opportunity cost of producing one more exam when the economy is already producing 6 exams?
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